DESERVE'S GOT NOTHIN' TO DO WITH IT

There's a conversation in my favorite western movie Unforgiven that goes like this:  Little Bill Daggett is about to be shot by Will Muny and he tells Muny that " I don't deserve to die like this.  I was building a house."  Muny replies with "Deserve's got nothin' to do with it."

I thought of that conversation after last week's appearance by the CEOs of the big three automakers before Congress.  It was by all accounts a disaster for them and their respective companies.  They have no one to blame but themselves.

I'm not blaming the CEOs, mind you, for poor performance during the hearing although certainly they did that.  Or more accurately, it's what they didn't say or do.  They failed to prepare themselves by having a business plan ready for how the bailout money would be invested and what improvements should be expected from that money.  They also nixed the idea of taking less compensation for themselves nor did they offer resignation in order to effect change.  And of course they committed a major faux pas by flying in separately in their Gulfstreams.

Despite the CEO's intransigent positions the real problem with the automakers is that they and the UAW haven't and can't adapt to the changed automobile market.  The global economy that arose during the last thirty/forty years allowed high quality automobiles to be built abroad or in the U.S. and sold here at prices cheaper than what the big three sold their cars for.  In fact during that time the UAW continued to bargain for and get higher wages and benefits to the point now that the auto companies cannot be competitive with foreign-owned automakers.  It's now reached a tipping point but unlike what GM's CEO would have you believe it's not related to the current financial situation.  Today's financial conditions have added fuel to the situation but the current situation the big three find themselves in has been coming for at least the last thirty years.  Management and the UAW finally cooperated--but in the worst possible thing--failure to change.

Unfortunately for me I'm familiar with that type of thinking.  My former company rocked in the eighties and early nineties and then failed to adapt to the changing market.  Now the company has closed plants, laid off hundreds and is desperately trying to survive.  But at least they acknowledged they had to do something to adjust. 

Last week's appearances by the CEOs reinforced my thought that they don't get it.  They're still living in a dream world with god knows how many brands and $150,000 a year employees.  They need to go legally bankrupt because they're already there.  That doesn't mean closure.  It means starting over with new and realistic labor contracts and a slimmed down product base and distribution channels. 

Unfortunately, it's not going to happen because their Democratic supporters are going to bail them out.  That party doesn't believe they can lose that political base.  When the CEOs show back up in December hat in hand, they'll get their bailout.  But deserve's got nothing to do with it. 

Comments

[Cielo]

I was wondering about that $150,000 / year salary for assembly plant workers myself. There were days when I thought I was overpaid as a systems analyst, making not quite half that salary. Dang.